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Purchasing & Supply Chain

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Purchasing & Supply Chain

As one of the five strategic areas of our Sustainable Development Strategy, we aspire to drive improvement within our supply chain in terms of overall sustainability performance through developing partnerships with our suppliers. We give strong preference to those who integrate social and environmental policies into their business processes.

Our aim is to address the sustainability of our supply chain through the ongoing implementation of our Supplier Code of Conduct and with continued engagement and collaboration with our suppliers. Internally, the Code was made available to general staff on the intranet, and was presented to outport General Managers. Supply chain risks were also discussed.

We are working to establish sustainable sourcing practices across all our operations. The process began by understanding resource utilisation at different business units. Part of this work included identifying items commonly procured and assessing areas where a reduction in our sustainability impact could be achieved. As examples of the successful application of this approach, during 2010, we progressively switched to sustainably sourced paper, including marketing collaterals, and agreement has been reached with our suppliers to offer sustainably sourced fish on flights departing from Europe to Hong Kong starting from early 2011. Some of our stakeholders acknowledge that we have made a good start in this area while others expect us to keep improving by communicating achievements and results.

When evaluating the current and future needs of our business and proposals from suppliers, we use a tried and tested evaluation tool as part of our purchasing decision process. This approach employs the criteria of Cost, Innovation, Satisfaction, Quality, Assurance of Supply and Safety, which are ranked on a case-by-case basis according to the needs of the business and the importance of each criteria in each specific case. We measure sustainability when we consider the "Safety" criteria, as safety in its broadest sense includes risk - and in the case of sourcing, the risk is of "un-sustainability".

Key issues raised by stakeholders on our Supply Chain
Support for and promotion of sustainable sourcing. Understand the carbon footprint of our supply chain. Transparency of the supply chain. Engaging suppliers and influencing passengers by selecting and offering responsibly sourced options. Report on monitoring and compliance results.
Sustainable sourcing

We are aware of the importance of accounting for the wider impacts of our supply chain that are not limited to environmental and social issues. We realise that change in our existing practice and processes may take time. Consequently, as part of our commitment to offer more sustainable products and services, our process allows us to request potential suppliers to provide information on alternative products with sustainable attributes for our future needs.

We published our first bi-annual Supply Chain Sustainability Newsletter in December 2010. It aims to help both staff and suppliers understand the importance of sustainable purchasing and responsible supply chain practices, and encourage suppliers to share with us how they are responding to their own sustainability impact challenges. The Newsletter provides suppliers with information on what matters to us, and in return we invite them to share what matters to them.

As one of the recipients of the 2010 Green Supply Chain Awards from the Supply & Demand Chain Executive, our efforts to put sustainability at the core of our supply chain management and our progress towards measurable sustainability sourcing goals in the supply chain were acknowledged.